Experts issue warning to anyone using credit cards on holiday

Holidaymakers jetting off this summer are being advised to keep an eye on their card fees when abroad.

TotallyMoney experts analysed the total cost of withdrawing cash overseas with a credit card throughout August, pointing out that most cards will impose an extra charge for cash withdrawals abroad.

It’s crucial to remember that these charges typically come in two forms – a cash withdrawal fee and non-sterling fees. These fees usually involve a minimum charge or a set percentage based on the transaction value.

Alastair Douglas, CEO of TotallyMoney, stated: “With the cost of travelling experiencing a significant rise in recent years, it’s more crucial than ever to stretch your money further. This can be achieved by researching a destination before flying off, setting a budget prior to your travels, and even by spending your money in the most cost-effective way while you’re away.

“Before jetting off, double-check whether your bank charges you for withdrawing cash or paying by card. Some of the steepest fees will occur when you use a credit card at an ATM, and it will generally be most expensive when withdrawing smaller amounts of money. Some banks will charge £4 in fees when you withdraw just £10 in cash equivalent. So if you must use a credit card, consider withdrawing fewer but larger amounts.”

With the cost of travelling seeing a real increase in recent years, it’s more important than ever to make your money go further. You can do this by researching a destination before jetting off, setting a budget ahead of your travels, and even by spending your money in the most cost-effective way when you’re away.

“If you can, always opt for a fee-free debit card. And whenever asked if you’d like to pay in pounds or the local currency, always pick the latter. That way you can avoid getting burnt by dynamic currency conversion fees too.”

The overall cost of withdrawing currency abroad

A study conducted by Moneycomms in August revealed the charges holidaymakers should be aware of when taking out cash abroad. Their research showed that a £10 equivalent transaction could see markups of more than 40% in some cases.

Andrew Hagger, Personal Finance Expert and founder of Moneycomms, advises: “Although credit cards give you financial flexibility and help you manage unexpected expenses, using them to withdraw currency at ATMs overseas can be an extremely costly way of funding your holiday spending.”

“Consider a fee-free credit card or a low-cost debit card as an alternative if you don’t want to see a big chunk of your overseas holiday budget swallowed up by cash withdrawal and non-sterling charges.”